GBP/USD Price Forecast – British pound relatively flat

The British pound initially tried to rally during trading on Wednesday but rolled over slightly as we continue to pull back from the lofty levels. Ultimately, the market has seen a massive surge higher, so this pullback may be necessary.
Christopher Lewis
GBP/USD daily chart, January 31, 2019

The British pound initially tried to rally during trading on Wednesday, but then rolled over to show signs of exhaustion again towards the 1.31 handle. With the Federal Reserve having a press conference late in the day on Wednesday, obviously, a lot of things can change. However, it appears that the British pound is simply trying to relax from the bullish move that has happened.

The Brexit situation continues to cause a lot of issues, as the back and forth between lawmakers continue to be a major driver of where the British pound will go. If the Brexit is a softer Brexit, that will, of course, help the British pound, as it is more favorable towards British businesses. Beyond that, there is also a lot of talk about the possibility of a delayed Brexit, which also brings down the possibility of a hard Brexit.

GBP/USD Video 31.01.19

We have recently broken above the 200 day EMA, and it is starting to curl to the upside. That is a bullish sign, and the 200 day EMA should offer a significant amount of support. We also broke above the down trending line of the previous descending triangle, so that, of course, is a bullish sign as well. Over the longer-term, it does look like we are trying to do what is known as a “golden cross”, when the 50 day EMA breaks above the 200 day EMA. We are obviously still a distance away from there, but it certainly looks as if what we are trying to accomplish with this latest surge higher.

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